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Even if you're a great boss there are a lot of things you
don’t know about your employees.

That's especially true where salaries are concerned. Here's what
employees think and feel about their pay... and what the great
bosses do:

Pay scales are like a pacifier for a weak boss: falling back on
pay scales is often the easiest way out of a difficult discussion
about pay.

Pay scales—and pay practices—are important to a company, but
they’re largely irrelevant to an employee who, often with good
reason, views them as as arbitrary rule.

Saying, “That’s just how our system is set up,” is a cop-out. If
the company can’t afford to pay an employee more, smart bosses
say so. If they think a certain percentage raise is fair, they
explain why. Smart bosses use pay scales to build their budgets,
and use reason and logic—and empathy—to explain pay decisions to
employees.

Many companies actively discourage staff from talking to each
other about their salaries. I know a few companies that require
employees to sign agreements stipulating they won’t disclose pay,
benefits, etc to other employees.

Doesn’t matter. Employees talk. I did, both when I was “labor”
and when I was “management.” Generally speaking, the only
employees who don’t share details about their pay are the ones
who are embarrassed by how much or how little they make.

Unless a business is struggling, most bosses only see employee
salaries as an item to consider when it’s time to prepare an
expense budget.

Employees think about pay all the time. Every time they deposit
their paychecks they think about their pay. To a boss their pay
is a line item; to employees, pay is the most important number in
their family's budget.

(Unfortunately many bosses spend a lot of time thinking about
their own pay but rarely apply that same perspective -- and
empathy -- towards their employees' pay.)

Smart bosses spend a little time each week thinking about ways
they can improve employee salaries and benefits. While they may
not be able to make substantial changes to what they pay, they
find other ways to improve how they compensate employees:
flexible hours, flexible benefits, better developmental
opportunities, etc.

Occasionally the job market is a seller’s market, but many new
employees are just really happy to land a new job. And since
business owners are born cost cutters, it’s natural to hire every
new employee for as low a wage as possible.

Then the employment honeymoon wears off and the employee feels
the company -- and the boss -- took advantage... and that feeling
never goes away.

Smart bosses never take advantage of a naive or desperate
employee. They know the gain is never worth the pain.

Plus it’s just wrong.

Here's why. Employees lose if only because they resent justifying
a certain pay level; in their view their boss should already know
their value. And the boss loses because at some point her or she
may have to say, in so many words, “I’m sorry, but you’re just
not worth that much.”

People are smart. They understand market conditions, financial
constraints, revenue shortfalls, and increased competition. They
understand when a company can’t pay top-of-market salaries. What
they don’t understand is when they don’t feel fairly compensated
compared to other employees in similar positions, both inside and
outside the company.

Once pay is reasonable and fair, other things become important:
recognition, respect, challenging work, opportunities for
development… basically the feeling that their job is more than
just a job.

The happiest and most engaged employees feel they work for
something more than just money. It’s a smart boss's job to
provide that sense of belonging and meaning. Without meaning,
employees are stuck simply working for a paycheck.

Higher pay is great... but the effects are fleeting.

Smart bosses know that respect, recognition, and a sense of real
purpose last forever.

What about you? What do you wish you could tell your
boss about your pay?